'Perfect storm' impacts consumer confidence
A ‘perfect storm’ of rising prices, increased taxation and interest rate hikes, have driven consumer confidence to the lowest level for over a year, according to new figures.
The long-running GfK Consumer Confidence Index fell seven points to minus 26 this month – the lowest reading since January last year – one of the worst points in the Covid crisis.
The consumer data and analytics firm said worries about pressure on household finances saw every measure of the survey fall a month ago.
With confidence in personal finances and the wider economic situation suffered the biggest drops – down 12 points and 11 points respectively.
GfK client strategy director Joe Staton said: "Fear about the impact of price rises from food to fuel and utilities, increased taxation and interest rate hikes has created a perfect storm of worries that has shaken consumer confidence.
"There's clear anxiety in these findings as many consumers worry about balancing the household books at the end of the month without going further into debt.”
He added: "Slowing consumer spending slows the wheels of the UK economy so this is unwelcome news. The good news is the easing or lifting of Covid restrictions seems to be doing little to lift the public's mood."
Linda Ellett, head of retail and leisure consumer markets at KPMG, said: "No longer facing Covid-19 restrictions, many businesses will have envisaged a consumer feel-good factor at this point of the pandemic.
"But the cost-of-living storm clouds are threatening to rain on this parade.”